EU signs free trade agreement with South Korea

The European Union (EU) and South Korea signed a free trade agreement Wednesday during the fifth summit meeting between the two sides.

The pact will come into force in July 2011, according to a deal reached earlier between the EU member states and South Korea.

"The agreement requires the two parties to eliminate 98.7 percent of duties in trade value for both industry and agriculture within five years, and to eliminate almost all remaining tariffs over a longer period," the EU said in a press release earlier.

Belgian Foreign Minister Steven Vanackere, whose country holds the rotating presidency of the EU, hailed the pact as "the most ambitious agreement ever" after the EU member states endorsed it last month at an informal summit meeting.

The EU and South Korea initiated the free trade agreement in October last year, providing for the progressive and reciprocal liberalization of trade in goods and services, as well as rules on trade-related issues such as competition and state aid, intellectual property, and public procurement.

Italy had refused to endorse the agreement, citing concerns on the impact on its auto industry. But the country dropped its objection after all sides agreed to delay the implementation of the pact until July 2011.

South Korea is the EU's eighth largest trading partner, while the EU is South Korea's second largest export destination

According to the EU, its trade with South Korea exceeded 65 billion euros (about 90 billion U.S. dollars) in 2008 and enjoyed an annual average growth of 7.5 percent from 2004 to 2008. 
(Source:xinhua)